Low cost method of marketing research

Marketing research is described as information collecting activities. It is important to inform organisations and managers on issues such as the effectiveness of advertising programs (promotion), the appropriateness of the pricing (pricing), the new good or service success (product adoption), the appropriateness of distribution (place) and the consumer decision-making processes (consumers). Marketing research helps managers to keep up with all the changes taking place in their markets so they can meet the needs of customers.

Marketing research has become increasingly complex and sophisticated in terms of the techniques and methods applied. Nevertheless, a manager should know the steps involved in a project, which are referred to as ‘the marketing research process.’

The marketing research process

Step 1: Define the problem, the decision alternatives and the research objectives

Step 2: Develop the research plan

Step 3: Collect the information

Step 4: Analyze the data

Step 5: Present the findings (The research report)

In step 2 the marketing managers decide the most appropriate and efficient way to gather the data, and to develop an appropriate budget to meet the research objectives. In this step budget would be consider. Which is the focus group and approach both affect the budget.

For qualitative approaches, the only way is observational research. For quantitative approaches, there are survey research, descriptive research and experimental or causal research.

In step 4 research should edit, code, tabulate, analysis and interpret the data which had been collect.

Step 3 is what we care in this blog, using which methods of contact customers. There are three methods for outside information. They are telephone research, online marketing research and interview. In these three, internet research is obviously cost less. And it also have other advantages, like no limited time period, data collected easily, objective and interviewer effects ban be controlled.

Besides outside information, companies also have internal records. It is also not cost too much. Companies generate a lot of information from accounting systems, budget systems, manufacturing schedules, etc. With the growth of management information systems, and the relative low cost of data, there is no excuse for organizations not being able to deliver information to managers. Although some data may need to be reprocessed into a form to suit a particular manager, the collection and distribution of information from internal records is relatively inexpensive.

Advertisements

13 thoughts on “Low cost method of marketing research

  1. Hi,
    Nice brief to what exactly market research is all about. If you wanted others to know the better perks of market research over Big data, you just clicked the perfect picture. On every aspect and considering everystep, traditional methods which are not so traditional find to be very cost effective than its competitive counterpart. Myself being a professional and someone who has got his hands dirty at both fields, i do understand where the two fields stand in the present day world. While it is tough to get on call or face to face interviews with star-studded professionals, when it comes to local consumers like us, such initiatives prove to be risk free and cost effective. And local consumers do have a good part when it comes to analysis of any product in the market whether it is product usability or market review.

    Liked by 1 person

  2. Your title “Low Cost Method of Market Research” made me think. In your summary Step 2 is critical, whether low or high cost, mistakes here can result in LOW VALUE market research.

    Henry Ford famously stated, “If I had asked people what they wanted, they would have said faster horses.” Asking them why they want faster horses? To get home from work faster to spend more time with their family would be a likely response. So focusing on the core need ‘faster transportation and freedom’ without the category frame of reference (horses) provides an opportunity for innovation, and opens the door for the automobile.

    The questions asked are so important.

    http://www.bandt.com.au/marketing/market-research-worthwhile-or-waste-of-time

    Like

  3. This blog clearly and briefly explained the research design. Although the Internet which is the cheapest way to do the market research, I still think that Internet is not very efficiently. Because when researchers sent email to responders that it’s usually no answer from responders. The researchers have to think how to make the responders reply and be interesting in the survey . Maybe they need to give some small gifts to responders, this part needs to include in the budget which causes the cost of survey very high. For the qualitative approach, I think sometimes we need to do exploratory research first then do the the descriptive and causal research. For example,before we do a survey, if we don’t know anything about this product such as customer preference, behavior and market trend, we should do exploratory research first. Trying to make a hypothesis and provide insights and understanding, then the descriptive and causal research based upon the outcome to develop the following research, because the exploratory research is the first step of the overall framework.

    Like

  4. In step 2 which is development of research plan the budget really wont matter…i personally believe that it should be efficient and not that costly but it wont hurt my pocket if it goes a little over because a mistake here would be costly in the later stages.

    Like

  5. I think you’ve hit the nail on the head with your final paragraph. What we tend to forget is that available at our fingertips are internal metrics that can aid or even in some cases avert the need for market research. We focus on big data, qualitative, quantitative research but tend to forget that at our disposal is historical sales data, internal market trends, current client purchase habits etc…. This is particularly important in B2B environments where wider consumer trending doesn’t necessarily paint an accurate picture. In that regard, the internal reviews of your company’s historical data prior to embarking on any type of market research can save you significant moolah in the long run if done correctly.

    Like

  6. You have told the method of how to conduct market research in very short and brief form, I would like to elaborate a bit on marketing research, the data collected from marketing research are all raw facts and need to be evaluated according to the needs of the user, sometimes the data may present some negative results which may give the entrepreneur negative feedback or a challenge to its marketing approach. Again an example from the marketing management blog is coming to my mind, the marketing research on Absolut Vodka which was to be introduced in US gave negative opinion and suggested that the Swedish brand should not be introduced in the market of US but the entrepreneur took a different approach and from the negative results of the research find out the weak points of the brand and introduced the brand which later proved successful in the market.
    Further market research is of varios types to have insights about products , customers or markets such as :
    • Cluster analysis for segmentation
    • Multi-dimensional scaling for perceptual mapping, targeting and positioning
    • Conjoint for new products
    • Scanner data for pricing
    • Surveys to assess customer satisfaction with inter as distribution option
    • Experiments to verify ad testing
    • Secondary data to understand context
    • Observational data to check on competitors
    • Networks to study collaborators
    • Interviews to study company’s employees
    • Surveys for customer satisfaction.

    Like

  7. Great post, but we need to keep in mind that things have changed , market research studies have lost great amount of value with digital enterprises knowing exactly their customer behaviour, and you don’t need to survey them anymore . It takes a few click for a web product manager to follow up in real time their customer behaviour: how the customer interact with the products, what does he likes and don’t like, how much is he willing to pay. This data can be collected directly by the company digging into their backend system or by plugging third party system. You can view and analyse your customers segment with Kiss Metrics and perform advanced customer’s behaviour queries with Google analytics. Similarly, some mobile Application tracking systems such as Flurry Analytics or Capptain helps track all in-app behaviour. When it comes to the TV screen, the new platforms such as Hulu, Netflix or Apple TV are doing a much better job at tracking real-time audience and viewer’s behaviour than did Nielsen tracking system over the past century.
    http://www.business2community.com/consumer-marketing/the-future-of-market-research-in-a-digital-world-0569634

    Like

  8. A nice summary on the marketing research process. For small businesses’ I think what is key is to use cost effective research methods (i.e. utilize information at their disposal) first. Discussions with staff, customer feedback, discussion with consumers directly (hopefully less by phone these days), emails etc. One food of though though, given most businesses these days focus on their core business strength, should marketing research (not marketing) be an outsourced activity? I just wonder if companies like Neilsen and others are in a much better knowledgeable and comprehensive position to do this work. For a small fee or it may well be worth the accuracy when it comes to segmentation studies and targeting products to the right market.

    Like

  9. This blog clearly write down the process of marketing research. For my point of view, use the internet such as email can be the cheapest way to do marketing research. However, people who received these kind of email always ignored it. For my own working experience, when I receive these kinds of email, I read the subject first, if it can’t make me interested, I will delete straight away. So how to get customer’s attention and make them interest in your email is quite important.

    Like

  10. Great Post, thanks.
    It is true that online research is time saving and less costly. Another advantage I would like to mention is that this form of research could provide access to groups and individuals who would be difficult to reach through other channels. In many cases, although people certainly discuss some issues among friends or family members, few can meet face to face in large groups to discuss these issues. But online research could gain access.
    However, a disadvantage is that older people who have poor internet and computer skills would be excluded if carrying out online surveys. Another example is the case of individuals with diseases or conditions such as physical disabilities. These people are also difficult to reach.
    In addition, once an email list is obtained, it is then possible to email an online survey invitation and link to every member on the list. In theory, this could provide researchers a sampling frame but problems such as multiple email addresses for the same person, several responses from participants and invalid or inactive email addresses can make random sampling online a problematic method.

    Like

  11. looking more insight to the research … The normal low budget research is most suitable for small scale business research. Their budget limit is very tight and they will be focused on the problems or either the innovative implementation to market. In-order to do the method, the data collection whether qualitative or quantitative method.. the research problem should focus on target customers and decide the market. from that point research the problem through sources like Internet , Library , Articles , speaking to the students, Trade Associations and Small business development centers… through that processing some literature review and comparing reviews and make the possible reports for the problem raised and that are predictive for that research either it could support the business and end result (positive or negative) will achieved once the methodology is implemented.

    Like

  12. The underlying principle of low cost marketing research is very important to many businesses these days. In many cases new startups simply can’t afford to conduct market research – there is just not budget for it. With this in mind, many business still go ahead purely because of an individual or partnerships entrepreneurial mindset. This can be risky business, but all business is a risk. This brings me to the importance of secondary data research. Startups and entrepreneurs really should attempt to research their markets, industries and consumers as best they can before trying to proceed with business. Especially in the case whereby entrepreneurs are seeking venture capital, angel investors or crowd funding. It’s nice to say I believe in my product and I think its the next best thing – but investors want figures and track records to make them believe in a product. This is partly why market research is so important. As for large companies that can afford substantial research, it’s safe to say they have already made a significant mark in their field/industry to get to where they have. However, to really become a lasting figure in a marketplace, a business should strive to make informed decisions based on market research. Consider a brand such as Virgin. How has Virgin been able to successfully implement huge marketing mix with great breath to it? In my opinion – simply they have discovered gaps in marketplaces and given consumers what they have been wanting. Yes a CEO or entrepreneur may have the right “hunch” or “gut feeling” at a given time, but when it comes to spending thousands to millions of investors money – you simply need to do your absolute best to minimise risk. I believe that for startups and new entrepreneurs, any market research is worthwhile. When seeking funding/budgeting by adding some funding for some further research is not bad way to start. When we consider that majority of new businesses fail within the first year – its worth while trying to work out why and what’s the common element. Obviously unsuccessful businesses don’t cater well enough to consumers to create that desire to buy their product/service. In turn, knowing the consumer, their desires and how best to try and fulfil these is integral. The best way of knowing your consumer is speaking to them directly through market research.

    Like

  13. Hi

    This is a good article, because now the company must control costs and reduce the cost of just what this article is about. In my opinion the marketing department is responsible for controlling the cost of the lowest cost to achieve the highest return, but sales are not the same. There are some views economic principles: is the cost incurred due to the implementation of cost control should not exceed the loss of control due to lack of effectiveness. Local conditions principle: is cost control system must be individually designed to suit the actual situation of a particular enterprise, department, cost jobs and projects, not copying someone else’s approach.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s